EUR/USD fluctuates around 0.9845 as USD weakens

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  • EUR/USD bounces off year lows near 0.9800 as price action overextends.
  • Sentiment remains negative, although it failed to support the USD.
  • US jobless claims came in better than expected, while EU consumer confidence disappointed.

The EUR it is almost sideways after hitting a new all-time low at 0.9806 following the Fed’s interest rate decision in September. The central bank further confirmed an aggressive approach as most policymakers expect further increases in the fed funds rate; therefore, interest rate differentials between the EU and the US are a headwind for the EUR/USD.

EUR/USD started trading around daily lows and hit a daily high of 0.9907 before paring those gains and settling around the current price zone. At the time of writing, EUR/USD is trading at 0.9842, posting a minimal gain of 0.03%.

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EUR/USD recovers some ground amid a weakening dollar

Global equities remain under pressure after Fed Chairman Powell and company hiked rates. The US Department of Labor reported that initial jobless claims for the week ending September 17 rose by 213,000 below an expected 217,000, outlining the “very tight” labor market, as put by the Chairman Powell at the press conference following the Fed’s decision on Wednesday.

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Meanwhile, the US Dollar Index erased some of its earlier gains, dipping 0.09% to 111.347, a tailwind for EUR/USD. By contrast, 10-year US Treasury yields remain positive, rising to 3.682%, gaining 14 basis points, after hitting an 11-year high of around 3.71%.

Meanwhile, adding to an already deteriorating economic scenario in the Eurozone, EU Consumer Confidence in September slumped to -28.8, beating estimates of -25.0. Meanwhile, the member of the Governing Council of the ECB, Isabel Schnabel, commented that inflation is still too high, for which further rate hikes would be necessary. Although she did not acknowledge a recession in the Eurozone, she warned that it could be inevitable in Germany.

What to watch out for

The EU calendar will include the S&P global PMIs for Spain, France, Germany and the Eurozone. In the US, the S&P Global PMIs will also be released, along with Fed Chairman Jerome Powell’s speech at around 18:00 GMT.

EUR/USD Key Technical Levels

EUR/USD

Panorama
Last Price Today 0.9844
Today’s Daily Change 0.0007
Today’s Daily Change % 0.07
Today’s Daily Opening 0.9837
Trends
20 Daily SMA 0.9985
50 Daily SMA 1.0091
100 Daily SMA 1.0299
200 Daily SMA 1.0711
levels
Previous Daily High 0.9976
Previous Daily Minimum 0.9813
Previous Maximum Weekly 1.0198
Previous Weekly Minimum 0.9945
Monthly Prior Maximum 1.0369
Previous Monthly Minimum 0.9901
Daily Fibonacci 38.2% 0.9876
Daily Fibonacci 61.8% 0.9914
Daily Pivot Point S1 0.9775
Daily Pivot Point S2 0.9713
Daily Pivot Point S3 0.9612
Daily Pivot Point R1 0.9938
Daily Pivot Point R2 1.0039
Daily Pivot Point R3 1.0101

Source: Fx Street

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